Citation Nr: 0729704
Decision Date: 09/20/07 Archive Date: 10/01/07
DOCKET NO. 05-15 302 ) DATE
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On appeal from the
Department of Veterans Affairs Regional Office in Houston,
Texas
THE ISSUE
Entitlement to a waiver of recovery of an overpayment of
nonservice-connected pension benefits.
REPRESENTATION
Appellant represented by: Texas Veterans Commission
WITNESS AT HEARING ON APPEAL
Appellant
ATTORNEY FOR THE BOARD
J. N. Moats, Associate Counsel
INTRODUCTION
The veteran had active duty service from May 1968 to May
1970.
This matter is before the Board of Veterans' Appeals (Board)
on appeal of a January 2005 determination by the Committee on
Waivers and Compromises (Committee), which denied the
veteran's request for a waiver of recovery of overpayment of
pension benefits. The Board previously remanded the case in
March 2007.
The veteran testified at a Board video conference hearing in
August 2007.
FINDINGS OF FACT
1. An overpayment of VA improved pension benefits in the
amount of $22,672.00 was not due to the veteran's fraud,
misrepresentation or bad faith.
2. The creation of the debt was due to fault on the part of
the veteran.
3. Withholding of benefits or recovery would not nullify the
objective for which benefits were intended, and the veteran
would be unjustly enriched if the benefits were not
recovered, since failure to make restitution would result in
unfair gain to the veteran.
4. The veteran did not change his position to his detriment
and reliance on these VA benefits does not result in
relinquishment of a valuable right or incurrence of a legal
obligation.
5. Recovery of the overpayment would not deprive the veteran
of basic necessities.
CONCLUSION OF LAW
The overpayment was not due to fraud, misrepresentation or
bad faith of the veteran; however, recovery of the
overpayment of VA improved pension benefits in the amount of
$22,672.00 would not be against equity and good conscience
and, therefore, is not waived. 38 U.S.C.A. §§ 5107, 5302(a)
(West 2002 & Supp. 2006); 38 C.F.R. §§ 1.963(a), 1.965(a)
(2006).
REASONS AND BASES FOR FINDINGS AND CONCLUSION
The appellant has requested waiver of the collection of an
overpayment of VA non-service connected pension benefits in
the calculated amount of $22,672.00. VA may waive recovery
of an overpayment of VA benefits if there is no indication of
fraud, misrepresentation, or bad faith on the part of the
person who received the benefits, and if recovery of the debt
would be against equity and good conscience.
38 U.S.C.A. § 5302; 38 C.F.R. § 1.963. Bad faith "generally
describes unfair or deceptive dealing by one who seeks to
gain thereby at another's expense. Thus, a debtor's conduct
in connection with a debt arising from participation in a VA
benefit/services program exhibits bad faith if such conduct,
although not undertaken with actual fraudulent intent, is
undertaken with intent to seek an unfair advantage, with
knowledge of the likely consequences, and results in a loss
to the Government." 38 C.F.R. § 1.965(b)(2). In January
2005, the Committee made a specific determination that there
was no fraud, misrepresentation, or bad faith on the
veteran's part with respect to the creation of the
overpayment at issue. The Board agrees with the Committee's
initial determination. The veteran's failure to notify the
VA of when he initially began to receive SSA benefits does
not appear to have been done with intent to seek an unfair
advantage in collecting VA nonservice-connected pension
benefits and with knowledge of the likely consequences.
Although the Committee determined that there was no fraud,
misrepresentation, or bad faith on the veteran's part with
respect to the creation of the overpayment at issue, the
Committee denied the veteran's waiver request based on their
finding that fault was found on the part of the veteran as he
failed to report Social Security Administration (SSA)
benefits for 2002 through 2004. The Committee noted that the
degree of fault could be somewhat mitigated by the veteran's
age. However, the Committee found no financial hardship to
the veteran because his income exceeded his expenses and the
veteran indicated that he could pay $100.00 per month towards
the debt.
In sum, the Committee determined that recovery of the
overpayment of VA improved pension benefits would not be
against equity and good conscience.
In cases where there is no fraud, misrepresentation, or bad
faith on the veteran's part with respect to the creation of
the overpayment at issue, and, therefore, waiver is not
precluded pursuant to 38 U.S.C.A. § 5302(a), in order to
dispose of the matter on appeal, the Board must determine
whether recovery of the indebtedness would be against equity
and good conscience, thereby permitting waiver under 38
U.S.C.A. § 5302(a) and 38 C.F.R. §§ 1.963(a), 1.965(a). The
pertinent regulation in this case provides that the standard
of "equity and good conscience" will be applied when the
facts and circumstances in a particular case indicate a need
for reasonableness and moderation in the exercise of the
Government's rights. 38 C.F.R. § 1.965(a). The elements of
equity and good conscience are as follows: (1) fault of
debtor, where actions of the debtor contribute to creation of
the debt; (2) balancing of faults, weighing fault of debtor
against VA fault; (3) undue hardship, whether collection
would deprive debtor or family of basic necessities; (4)
defeat the purpose, whether withholding of benefits or
recovery would nullify the objective for which benefits were
intended; (5) unjust enrichment, failure to make restitution
would result in unfair gain to the debtor; (6) changing
position to one's detriment, reliance on VA benefits results
in relinquishment of a valuable right or incurrence of a
legal obligation. The first and second elements pertain to
the fault of the debtor versus the fault of the VA.
The record shows that the veteran was awarded nonservice
connected pension in a June 1998 rating decision, effective
December 1, 1997. An August 1998 letter to the veteran
clearly stated that the veteran must report any changes to
his family income. In a January 1999 improved pension
eligibility verification report (IVR), the veteran reported
that he had an income of $11,586.21 for 1998. Thus, in a
February 1999 letter to the veteran, the RO terminated
payment of pension benefits because the veteran's countable
income exceeded the maximum annual pension rate (MAPR) of
$11,349.00 for the veteran with one dependent. In an
attempt to get his pension benefits reinstated, in March
1999, the veteran filed another IVR showing that his spouse's
income was zero. A March 1999 financial status report showed
that the household income was zero and that the average
monthly expenses were $1082.00. However, information
subsequently furnished by the veteran showed income of
$13,199.00. A subsequent September 1999 IVR indicated that
the veteran was separated from his spouse, he had no monthly
income, and his monthly expenses were $655.00.
The veteran submitted another IVR in May 2001, which again
showed that he was separated from his wife and had no income.
An April 2002 Report of Contact showed that the veteran
indicated he had been separated since November 1999, he was
unemployed and residing with his mother, and he was not in
receipt of SSA benefits. Thus, the veteran's pension
benefits were reinstated, effective May 1, 2002. An April
2002 letter again clearly notified the veteran that he must
report any changes in his income. In July 2004, the RO
notified the veteran that it had received information that he
had been receiving SSA benefits since December 1999 and
proposed to terminate payment of VA benefits.
As of the date that the veteran's pension benefits were
reinstated on May 1, 2002, the veteran was receiving $1059.00
per month from SSA for a total of $12,708.00 annually. This
amount exceeded the MAPR of $9,556.00 for a veteran with no
dependents in 2002. Thus, in September 2004, the RO notified
the veteran that his pension benefits were again terminated,
effective May 1, 2002. In October 2004, the veteran was
notified of the $22,672 debt that he incurred. That same
month, the veteran requested waiver of the debt, and
indicated, in the alternative, that he could only afford to
pay $100.00 per month towards the debt.
Initially, the Board notes that it is the responsibility of
the pension recipient to notify VA of all circumstances that
will affect entitlement to receive the rate of the benefit
being paid, and such notice must be provided when the
recipient acquires knowledge that his income has changed.
See 38 C.F.R. §§ 3.277, 3.660(a)(1). After consideration of
the record and the applicable regulatory provisions, the
Board finds that the veteran was at fault for not notifying
the VA of his SSA income. He was repeatedly notified via VA
letters of his obligation to fully report his income as a
pension recipient and he did not do so. Importantly, the
Board notes that as the veteran's pension benefits had
previously been terminated because his household income
exceeded the MAPR, the veteran was obviously well aware of
his responsibility to report his income. The Board
acknowledges that in his February 2005 notice of
disagreement, the veteran stated that he went to the RO and
notified the person working at the front desk that he was
receiving SSA benefits. He indicated the he filled out and
signed paperwork. Further, in his August 2007 hearing
testimony, the veteran also indicated that he notified his
representative and the RO in person. However, there is no
documentation of any such paperwork in the claims file.
Further, the United States Court of Appeals for Veterans
Claims (Court) has held that in the absence of clear evidence
to the contrary, the law presumes the regularity of the
government's administrative processes. Jones v. West, 12
Vet. App. 98, 100 (1998); Ashley v. Derwinski, 2 Vet. App.
62, 64-65 (1992). The Court has also specifically held that
a statement by a claimant, standing alone, is not sufficient
to rebut the presumption of regularity in VA operations. Id.
Therefore, the Board is unable to conclude that VA received
notification in person of the veteran's receipt of SSA
benefits as alleged by the veteran. Moreover, the Board
finds it significant that the veteran continued to receive VA
benefits and did not alert the VA to the fact that the amount
of his benefits was based on him not having any income.
Thus, the Board finds that the overpayment is the result of
his own actions.
In regard to whether collection would defeat the purpose of
the benefit and whether failure to collect would cause unjust
enrichment to the debtor, the Board notes that the veteran
received benefits he was not entitled to receive or in excess
of what he was entitled to receive. Thus, the recoupment of
those benefits did not defeat the purpose of the benefit
because the veteran had too much income to receive the amount
of pension benefits that he was paid. The veteran was fully
informed to report all income and he did not do so. A
failure to recoup the benefits would cause unjust enrichment
to the debtor for the same reason because the veteran's rate
of pension was not paid on his actual income computation.
Likewise, there is no indication that the veteran's reliance
on VA benefits resulted in relinquishment of another valuable
right.
The Board has also considered whether the veteran would
suffer undue financial hardship if forced to repay the debt
at issue. In November 2004, a financial status report was
received. The veteran reported that his monthly income was
$1059.00 and his monthly expenses were $950.00. Thus, he
indicated that his net monthly income exceeded his expenses
by $109.00 and that he could pay $100.00 towards his debt.
Moreover, the veteran's August 2007 hearing testimony does
not show that the veteran's monthly expenses exceed his
income to the point where undue hardship would result if
forced to pay the debt at issue. In other words, it appears
that the veteran is able to pay his monthly expenses. Thus,
the Board does not believe that recovery of the overpayment
would deprive the veteran the basic necessities of life.
Quite the contrary, according to the most recent November
2004 financial status report, it appears that the veteran is
able pay his rent, food, utilities, etc. and still have
$100.00 remaining to put towards his debt. The Board is
simply unable to conclude that there is undue financial
hardship in this case.
In sum, after weighing the facts in light of the principles
of equity and good conscience, the Board finds that the
preponderance of the evidence is against entitlement to
waiver of the recovery of the overpayment.
The Board notes that the Veterans Claims Assistance Act of
2000 (VCAA), codified at 38 U.S.C.A. §§ 5100, 5102, 5103,
5103A, 5106, 5107 (West 2002); 38 C.F.R. §§ 3.102, 3.156(a),
3.159, and 3.326(a), redefined VA's duties to notify and
assist a claimant in the development of a claim. However,
the notice provisions of the VCAA are inapplicable to waiver
claims. Barger v. Principi, 16 Vet.App. 132 (2002).
ORDER
The appeal is denied.
____________________________________________
ALAN S. PEEVY
Veterans Law Judge, Board of Veterans' Appeals
Department of Veterans Affairs